openhurdle:

The long view, the farther out months for oil trading is in "backwardation" regarding pricing, so it shows pressure on the spot price contract. However the contango relationship, when it returns, should be evidence of a possible turn in the trend. Pair it with the COT data and to me there are no clear signs of a top in oil yet. This does not mean there won't be corrections, but there will be just that, CORRECTIONS, and nothing more.

Well and good, but that doesn't explain WHY the backwardation is there on a mechanical level.  Prices are determined by supply and demand, and futures prices presumably try to predict future supply and demand conditions.  Do people expect future supply would be higher, future demand lower, or what?  If the long-term futures prices do not accurately reflect supply and demand, there should be an exploitable arbitrage opportunity here.

 My guess is, one, speculators like to speculate using the front months, as those are far more liquid (just TRY to buy 2015 oil contracts ;)  And two, people really do expect supply to ramp up over the next 9-12 months which can pretty much only happen by means of a swing producer, which pretty much means the Saudis (as there is purely no way that new capacity can be put into production in that time frame).  But I happen to think the Saudis have no excess capacity, so...